Eastern and Central European countries call on EU to strengthen carbon fund for the poorer members
A letter obtained by? showed that Eastern and Central European countries, including Poland, Bulgaria and Romania, have asked the European Union to strengthen a fund which?helps EU poorer nations transition to cleaner energy. A letter seen by? showed that Brussels is preparing to restructure the EU's largest climate change policy.
The European Commission, which is working on a revision to the EU Emissions Trading System (ETS), is receiving competing requests from both governments and industry about how best to modify the massive scheme. The Commission's proposal is due by July 15.
In a letter dated June 19, 12 governments urged the EU to strengthen its "modernisation fund", a pot of revenue from carbon market permit sales, which has invested over 20 billion euros (22.85 billion dollars) since 2021 in order to help EU's poorest members?wean themselves away from fossil fuels.
The letter stated that "in the current political and economical context, which is characterised by an increased level of geopolitical risk and uncertainty, predictable funding mechanisms remain?an essential condition for success in the energy transition within the EU."
"We demand a significant increase in the size of the financing to match the increasing challenges of the Transition."
Signed on the letter were Greece, Croatia, Hungary and Latvia, Lithuania as well as Slovakia, Slovenia, and the Czech Republic.
The EU's ETS review was intended to overhaul the carbon market on a long-term basis, beyond 2030, in order to align it with the EU's 2040 climate goals to reduce emissions by 90%.
The plan is now embroiled in a political debate over how to reverse Europe's declining industrial competitiveness. Italy and the Czech Republic, among others, have asked Brussels to weaken the ETS in order to reduce short-term costs to local industries. However this could also result in less funding being available to fund the transition to clean energy.
The fund helps the 12 countries that are 'behind' the letter of the law, plus Portugal. Its aim is to help the EU's less wealthy members keep up with its targets for reducing 'emissions'.
The scheme has supported investments in recent years including energy-saving renovations at?public thermal pools in Hungary and Poland's Clean Air financing programme, which helps families replace their polluting heating system and insulates their homes.
Bloomberg News reported the letter earlier in the day. ($1 = 0.8751 euro) (Reporting and editing by Kate Abnett, Susan Fenton).
(source: Reuters)
